Detailed Analysis of the CA, CWA, and CS (Amendment) Bill, 2022

Introduction

The Chartered Accountants, the Cost and Works Accountants, and the Company Secretaries (Amendment) Bill, 2021 (‘Bill’) was introduced in Lok Sabha on December 17, 2021. The Bill proposes to amend the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959, and the Company Secretaries Act, 1980 (‘Acts). The Bill has been passed by the Lok Sabha on 30-03-2022.

The Amendments have been proposed in the Acts with a view to —

(i) strengthen the disciplinary mechanism by augmenting the capacity of the Disciplinary Directorate to deal with the complaints and information and providing time-bound disposal of the cases by specifying the time limits for speedy disposal of the cases against members of the Institutes;

(ii) address conflict of interest between the administrative and disciplinary arms of the Institute;

(iii) provide for a separate chapter on registration of firms with the respective Institutes and include firms under the purview of the disciplinary mechanism;

(iv) enhance accountability and transparency by providing for the audit of accounts of the Institutes by a firm of chartered accountants to be appointed annually by the Council from the panel of auditors maintained by the Comptroller and Auditor-General of India;

(v) provide for autonomy to the Council of the respective Institutes to fix various fees.

The article has been divided into 4 parts, the first part discusses ‘Amendment applicable to Chartered Accountant Act, 1949’, the second part discusses ‘Amendment Applicable to The Cost And Works Accountants Act, 1959’, the third part discusses ‘Amendment Applicable to The Cost And Works Accountants Act, 1959’ and the last part discusses the ‘Amendments that are applicable to All three institutes.

A. Amendments Applicable to the Chartered Accountant Act, 1949

1. Amendment in title and preamble of the Act

The bill proposes to amend the title and preamble of the Chartered Accountant Act, 1949 by substituting the word “regulation” with the words “regulation and development”.

2. Proposed insertion of a new section “9A” with respect to setting up of “Coordination Committee”

The proposed bill seeks to insert a new section 9A in the Act with respect to the setting up of the coordination committee. The objective of the proposed insertion is to harmonize the professions of Chartered Accountants, Cost Accountants and Company Secretaries.

The proposed amendment also provides that the coordination committee shall be consist of :

(a) the President,

(b) Vice-President and

(c) the Secretary of the Council of each of the Institutes

For the development and harmonisation of the professions of Chartered Accountants, Cost Accountants and Company Secretaries.

The coordination committee will be responsible for the effective coordination among these 3 institutes.

The standing committee of the parliament had also favored the proposed amendment as currently, there are no provisions with respect to setting up of the coordination committee in the Act. The Co-ordination Committee among three Institutes has been constituted in an informal manner. As these 3 institutes together constitute an integral part of Corporate Governance and financial monitoring across the country. Therefore effective co-ordination between three Institutes should be there.

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President assents to the CA, CWA, and the CS (Amendment) Act, 2022

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